Bitcoin eyes post-Christmas volatility after 22.8% Q4 drop
Bitcoin dropped 22.8% in Q4 2025 and is consolidating just above $85,000 amid thin holiday liquidity and slowing demand. The main near-term catalyst is a large options expiry on Dec. 26 (Boxing Day). Open interest shows declining $85K put exposure while $100K calls remain, creating a pin between $85K–$90K with roughly $300m in gamma exposure. Liquidation heatmaps reveal upside short‑liquidity clusters at $90K–$95K and downside pools near $84K, raising the chance of sharp intraday moves once options settle. On-chain data from CryptoQuant signals demand growth has cooled since October and now runs below trend, flagging interim support near $70K and a potential cycle bottom around $56K. Analysts expect choppy trading through the holiday period; post-expiry order flow, shifts in puts vs calls, gamma exposure and exchange flows will determine whether traders get a volatility-driven bounce or renewed selling pressure. Key trading considerations: monitor open interest and gamma around $85K–$90K, liquidation and short‑liquidity clusters, post-expiry flows on Dec. 26, and broader demand indicators for signs of extended downside.
Bearish
The combined reports point to higher short-term volatility but a negative price bias for Bitcoin. Key bearish factors: a 22.8% quarterly drop signaling weakening momentum; CryptoQuant on-chain data showing demand growth below trend and a suggested cycle bottom near $56K; and thinning holiday liquidity that increases the risk of outsized moves. Options positioning is mixed — declining $85K put open interest reduces some downside insurance while $100K calls remain — creating a concentrated gamma pin at $85K–$90K that can trigger sharp moves but does not eliminate underlying weakness. Liquidation heatmaps show short-liquidity clusters above current prices and downside pools near $84K, implying that both sharp rallies and collapses are possible intraday; however, with demand cooling and macro uncertainty intact, any post-expiry rally is likely to be short-lived unless sustained bid returns. For traders: expect choppy action through the expiry and holiday period, monitor post-expiry order flow, OI shifts (puts vs calls), gamma exposure, and exchange flows. In the near term this setup favors downside or range-bound behaviour with episodic volatility rather than a durable bullish reversal.